Rogue Columnist

Rocky Mountain requiem

For a moment this morning I thought about asking a friend in Denver to send me a copy of the last edition of the Rocky Mountain News. But, no. It would hurt too much. After nearly 150 years, one of America's very good, and sometimes great, newspapers died today. Denver and America will be the worse for it.

For those of you dancing on the graves of newspapers, and the others who have their pet ideas for "saving" them, which always seem to continue the failed dumbing-down policies of the past 25 years (oh, but with streaming video and mom pages!). For those who think crowdsourcing and local opinion blogs can replace professional journalists in the lives of communities. All of you can stop reading now. I'm also tired of discussing the demise of the press -- I've already made my views known. I hope the rest of you will stay for the wake.

Let there be no false sentimentality. The Rocky considered me a traitor because I chose to leave in 1993. I was young and ambitious and stupid. Yes, a traitor. We were in a war with the Denver Post -- and what a war it was.

The best show in town

Be sure to check out the latest Kookocracy Watch, updated for your pleasure as you bring your guns to bars.

Phoenix stumbles into an epic reshuffle

A reader passes along word of a sign seen in Phoenix: "Please God, let there be one more housing boom and this time I won't piss it all away." Yes, you would. To paraphrase Linda Hamilton in Terminator: It's what you do. It's all you do."

The bad news isn't just that Phoenix continues to lead the nation in house-price declines -- down a stunning 32.7 percent for 2008. It's not just that the bubble is only 60 percent deflated nationally, by some estimates -- so good luck with that spec house in Maricopa. It's that the whole Ponzi scheme is over.

Urban theorist Richard Florida calls cities like Phoenix and Las Vegas out in an influential article in the March issue of Atlantic magazine. The title: How the Crash Will Reshape America. "The boom itself neither followed nor resulted in the development of sustainable, scalable, highly productive industries or services. It was fueled and funded by housing, and housing was its primary product. Whole cities and metro regions became giant Ponzi schemes." In other words, pissed away. Now it may be difficult for Phoenix to avoid being one of the biggest losers as the competitive geography shifts decisively because of the Great Disruption.

What you do with zombies

The time for good options to deal with the banks was in, oh, 1999. That was when the Gramm-Leach-Bliley Act passed, repealing the last of the Depression-era regulations that had kept the American banking system sound for more than six decades. (Yes, the same Gramm who got rich once he left the Senate and joined a big bank, and called us a "nation of whiners.") Now some of our largest financial institutions are Zombie Banks -- but we have no Mila Jovovich armed with miniskirt and full arsenal to take them down. They are left with only the most primal instinct: To feed on the Treasury. Resident Evil, indeed.

Paul Krugman makes the case for nationalization today. Socialists Lindsey Graham and Alan Greenspan have also signed on. Economist Nouriel Roubini, who called the crash, says a takeover would avoid throwing good money after bad. Indeed, some of this is not too complicated: Think back to the wreck of the Penn Central railroad, when the government stepped in and created Conrail. Later it was relaunched as a successful public company. Receivership is a better way to think of this than the charged word "nationalize."

Who loses? The shareholders. And as much as one might get a populist shiver up the leg from the idea of some big hedge funds getting sucker punched, remember that average Americans were lured into the market, too. They've lost about half their nest eggs already. Those in bank stocks -- and Bank of America and Citi are widely held -- will lose more. But, as Jovovich's Alice teaches us, you can't mow down a bunch of zombies without collateral damage.

Say you want a revolution?

One of the greatest dangers to peace lies in the economic pressure to which people find themselves subjected.

--Calvin Coolidge

You can't handle the truth!

-- Jack Nicholson

The honorary Page One Editor of Rogue Columnist and I have been in a friendly argument of late over when, or whether, the riots will begin. He sees sooner than later, as people are faced with the worst economic crisis in 80 years -- perhaps in the history of the nation. Things will not turn around soon, and may well get much worse. And having worked around the world in some miserable and boiling hot-spots, he offers observations that should be discounted at one's peril. Former National Security Adviser Zbigniew Brzezinski echoed this on MSNBC's Morning Joe, saying, "Hell, there could be even riots" as the unemployed take aim at the rich bastards that caused the calamity and are still doing fine.

I've tended to say later or never -- the nation is too narcoticized by American Idol, Grand Theft Auto, endless driving, limitless digital distractions, the deadening civic isolation of suburbia. Human nature is unchanging but Americans have changed. They have become easily led. Short-changed of an education in history, civics and the humanities, too many Americans are just plugged into the matrix, sucking Wal-Mart subsistence, waiting for their next cog assignment.

Now, I'm not so sure.

GM and Chrysler: Hasta la vista, baby

In earlier posts, I've urged federal help for the automakers. It would be a calamity to lose this manufacturing backbone, which especially props up what's left of the middle class in places like Michigan and Ohio. There was a large "if," however -- if the automakers fundamentally changed their business models to focus on green technology and building transportation for the 21st century beyond automobiles, particularly transit and rail.

Not surprisingly, none of that is coming true despite GM already receiving $13.4 billion in federal loans and Chrysler getting $4 billion. About the best GM can do is phase out the evil Hummer. Otherwise, it's business as usual and worse: cut 47,000 jobs worldwide, shut five more U.S. factories and phase out Saturn, the brand launched in the late 1980s as the reinvention of General Motors.

There comes a time to let go. It will be painful, but it's time. We need to let GM and Chrysler fail.

I told you so

Every time the Arizona Republic's journalists manage to sneak in a story about the depression ravaging metro Phoenix, I am deluged with emails from people, telling me how "I called it" years ago -- "You were so right." They are generous about my seven years as a columnist in my hometown. It didn't take a genius to see where Phoenix was heading. And, both to preserve my job and keep some alliances for the greater good, I pulled my punches way too often.

Sunday's story was headlined "Growth pattern crippled Phoenix." (Is it just me, or does the Republic usually use "Phoenix" in a headline about "bad" news, but "Valley" in every other reference to the metropolitan area?). It focuses on the disaster in the newest fringes of sprawl, but also calls into question the entire growth model. Or, as the story puts it, "Phoenix grew into the nation's fifth-largest city through a reliable pattern: Build affordable homes on the metro area's edges, welcome waves of new buyers, and then roads, schools and retail centers follow." It goes on:

One reason the current housing collapse has been so brutal in Phoenix is how suddenly that pattern broke down. In only a couple of years, the breakdown trapped people in unfinished communities much like a fast-moving landslide buries people in their tracks.

Happy Arizona statehood day

The biggest issue no one wants to discuss

Financial Times pronounced the recent Davos conference the gloomiest in its history. The "global agenda" of world leaders has crumbled. With the Doha round of trade liberalization in shambles, "protectionism" is seen on the rise. This is one thing that happens during historic economic collapses: old arrangements, particularly unsustainable ones, crash down. This is what happens when an old order enters an pivot point of discontinuity, where the future will be profoundly different from the recent past.

Dangerous destabilization is headed our way. This is why Dennis Blair, the national intelligence director, said this week that the global economic collapse is the biggest threat to the United States, bigger than al Qaeda. The more we try to deny the current reality, or return to the bubbles of the past decade, the worse the reckoning. This is also true of trade. The "free trade" regime that has coalesced since 2000 has hugely benefited the swells and oligarchs that attend Davos, especially by increasing their personal wealth thanks to cheap labor in developing countries.

But the millions of Americans who have lost well-paid manufacturing jobs as a result, with nothing to replace them but a collapsed housing bubble, don't do Davos. They are not all blameless, to be sure. Like all Americans, they are blissfully unaware of the consequences of their consumer decisions. So they happily shopped at Wal-Mart as their jobs went away. No matter. Beware the meme that facing this, as in an abortive House attempt to put a "buy American" provision in the stim package, is "protectionism." Going forward, a new world trade arrangement is essential. It is the biggest issue facing the country that no one in power wants to discuss.

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Legalize drugs?

Seattle Police Chief Gil Kerlikowske has been selected as the nation's next "drug czar." His predecessor, Norm Stamper, argues for legalization, saying that the "war against drugs" has not only failed, but inflicted misery on people and undermined the effectiveness of law enforcement. (Watch an interview here). The divergence shows a blue divide little known to civilians, with a growing number of police officers who want partial or full decriminalization of drugs. I certainly hear it from the cops who help me in the research for my mysteries. There's an organization, Law Enforcement Against Prohibition (LEAP), dedicated to the cause.

Decriminalization is one of the last issues where you'll find both liberal and conservative supporters. For example, National Review, which at least once represented an intellectual brand of conservatism, urged legalization years ago. NR said "the drug war is lost." Chief Stamper put it this way:

It's not a stretch to conclude that our Draconian approach to drug use is the most injurious domestic policy since slavery. Want to cut back on prison overcrowding and save a bundle on the construction of new facilities? Open the doors, let the nonviolent drug offenders go. The huge increases in federal and state prison populations during the 1980s and '90s (from 139 per 100,000 residents in 1980 to 482 per 100,000 in 2003) were mainly for drug convictions. In 1980, 580,900 Americans were arrested on drug charges. By 2003, that figure had ballooned to 1,678,200. We're making more arrests for drug offenses than for murder, manslaughter, forcible rape and aggravated assault combined. Feel safer?

Why tax cuts won't stim this time

At the moment, tax cuts make up 42 percent of the so-called stimulus bill. This dooms it to be ineffectual, if not actually making things worse. The latter will happen because this is all borrowed money. Public investments provide the means to repay it by improving commerce and productivity. Tax cuts just piss it away. Where are the fighting liberals who are going to filibuster this mess and make the president realize his bipartisanship dance has only reinvigorated the Republicans, the party that wrecked America?

In 2003, Nobel laureate economist Paul Krugman laid out the exhaustive case against the cult of tax cuts, in a must-read, must-keep article in the New York Times Magazine. Yet this remains the only idea of the GOP, the party that wrecked America. And it has been given center stage by a naive president and weak Democrats who don't know how to act as winners. As a consequence, public investments in infrastructure, the best way to generate jobs and a return for the future, have been pared back. The perfect should not be the enemy of the good. But this is a rotten bill, and it is the enemy of the good, whether the punked good has realized yet or not.

Stimulus lesson

Here's the salient paragraphs from a New York Times story today on where the big Japanese stimulus of the 1990s went wrong:

“In hindsight, Japan should have built public works that address the problems it faces today, like aging, energy and food sources,” said Takehiko Hobo, a professor emeritus of public finance at Shimane University in Matsue, the main city of Shimane. “This obsession with building roads is a holdover from an earlier era.”

and

“Roads and bridges are attractive, but they create jobs only during construction,” said Shunji Nakamura, chief of the city’s industrial policy section. “You need projects with good jobs that will last through a bad economy.”

Put the heat on your lawmakers to support transit. A good start is here and here.

So much for the honeymoon

I keep telling myself that the woozy feeling that the Obama administration is already failing is mainly due to the 24-hour news cycle. We get to see the sausage-making in real time. And the sudden ubiquity of Republicans all over the corporate media, despite the public's rejection of their failed ideas. I keep telling myself all this.

Still, some worries. If Rahm Emmanuel is so incredibly effective as Obama's right-hand, he has yet to show it. The so-called stimulus is bogged down and deeply flawed. One cabinet nominee after another is tripped by tax or conflict-of-interest problems. It's nice that Obama admitted a mistake, but he has yet to focus, in simple, Reaganesque language what he wants and use it to go over the head of an obstructionist Congress.

Why am I not comforted that a group of "moderate" senators is trying to cut $100 billion of "fat" -- the media's term -- from the stimulus? In this supposed lard is mass transit funding desperately needed for systems that are already cutting back -- hurting the working poor the hardest. Transit and rail are my markers for real change, and given stable funding they would provide jobs paying family wages that couldn't be sent overseas. Fat? How about South Carolina's unremarked interstate to nowhere?

More beer saves Arizona economy

Today's installment of the Phoenix Laff Riot begins with Tuesday's truly pathetic story in the Arizona Republic headlined "Big game proves a winner for state economy." Ordered up, no doubt, by the "say something positive about the community" bosses, here's the gist:

Consumers who had been watching their pennies splurged in celebration of the Arizona Cardinals in the Super Bowl, giving the state's ailing economy an unexpected shot in the arm. Fans bought hats, T-shirts, televisions, snack trays and beer. They partied at sports bars and in homes around the state, cheering on the Cardinals.

Let's apply a little critical thinking not allowed in news meetings. The story has no data to back up this claim. And even if people spent more on beer and chips for the game, it simply changes the shape of the water balloon. In other words, that consumer spending was diverted from other areas; the Big Game didn't represent an increase in purchasing power or living standards. That would require, oh, a diverse economy with well-paid jobs and an educated workforce. In any event, even Super Bowl economic impact reports by real economists are always suspect, requiring a skepticism that was once required of journalists.

Howard Dean for HHS

With Tom Daschle finally buried under the avalanche of his conflicts of interest, how about a candidate from the Democratic wing of the Democratic party? Dean is a physician. With his successful 50-state resuscitation of the Democratic Party, he's shown he can run a complex organization. As a governor, he has executive experience. He's progressive and independent and nobody owns him. Will those attributes be disqualifying?

Meanwhile, watch this old Daschle campaign ad. Laugh or cry.

The Daschle scandal

As much as rendition, the Iraq scam and the looting of the Treasury for bank bonuses, Tom Daschle makes me wonder if the coup has already happened and America is under the control of a shadow government, whatever the outcome of elections. As you know, President Obama's choice to be the Secretary of Health and Human Services -- and point man on health care reform -- has a tax problem. He failed to pay $140,000 in taxes, as the New York Times genteelly puts it, "related to income for consulting work and the use of a car made available to him by a close friend who is also a generous donor to Democratic causes."

We have a task of civic rebuilding after 25 years of more-or-less "conservative" misgovernance -- chief on the list restoration of a fair and adequate revenue base for government, and teaching people there's no free lunch. Tax cuts are not a magic elixir. Taxes are the cost of a modern society. Daschle, like Treasury Secretary Timothy Geithner before him, is no better than a fat Republican tax cheat -- with the added hypocrisy of wanting (rightly) to raise taxes. These are the Ted Haggards of tax policy.

Yet more troubling is the window Daschle's "embarrassing" slip gives us into the permanent power elite.